Is Google Stock Halal? Screening Results Found It Questionable

You may want to buy Google stock, but you are concerned if it is halal or not.

Stock – Google

Ticker – GOOGL

Sector – Technology

Compliance Status – Questionable

Why it is a buy – GOOGL stock has jumped 61% in 2021.

Let’s take a look at their financial results. To consider if Google stock is halal, we will use the three financial ratios criteria to evaluate its halalness.

  1. The business activity
  2. Interest-bearing debt to its market cap
  3. Interest-bearing securities to its market cap
 

Google’s Business:

Google was founded in 1998, and Alphabet became the parent holding company of Google in 2015. Currently, Alphabet, Inc. is a holding company that employs 144,056 full-time employees. The company’s businesses include Google and its internet products such as Calico, GV, Nest, Verily, and X. The firm’s segments include Google and Other Bets. The firm’s Google segment includes Internet products such as Search, Ads, Maps, YouTube, Android, Chrome and Google Play, Google Services, and Google Cloud. In addition, The Google segment deals with advertising, sales of digital content, applications and cloud offerings, and hardware products. While the Other Bets segment is engaged in Internet and television services, licensing, and research and development (R&D) services. 

Financial Screening

Firstly, we check business activity. The company’s impermissible business activities account for 0.50% of its overall revenue. However, 80.37% of total revenue comes from questionable activities. Since non-Islamic business segments may exceed 5% of its total revenue, Google does not pass the business activity screening.

Secondly, we analyze its interest-bearing debt ratio. The debt amount should not exceed 30% of its market cap. The percentage of interest-bearing debt is 2.50% of Google’s market cap.   

Total Debt$14.81B
36 Months Average Market Cap$592.41B

Finally, we screen the interest-bearing securities ratio. Google’s interest-bearing securities account for 22.61% of its market cap. The number of securities that aim to receive interest should not exceed 30% of its market cap. 

Cash & Equivalents$133.94B
36 Months Average Market Cap$592.41B

Although Alphabet Inc passes two financial screenings, more than 5% of its total revenue may come from unknown business activities. Therefore, Google stock is one of the doubtful stocks from a Sharia Perspective, and Muslim investors may want to avoid investing in such questionable investments. 

Musaffa also has a halal stock screener where you can access the materials anytime and get the full report about the Compliance status of stocks. Visit our platform: musaffa.com.

To read more about Islamic Finance related topics, please click here and visit our academy.

Besides, feel free to sign up for our free stock screening services at musaffa.com.

 

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